Indian journalist Palagummi Sainath warns that corporations have hijacked the agricultural sector in India, with dire consequences for household farmers.

“On the one hand, you have a country that ranks fourth, sometimes fifth, in the lists of dollar billionaires. On the other hand, [India] ranks 135th in the United Nations Human Development Index.”

UCLA International Institute, November 5, 2014 — The drive towards corporate farming in rural India has resulted in the “predatory commercialization of the countryside,” said Palagummi Sainath at a recent talk organized by UCLA’s Center for India and South Asia and the departments of history and communication studies.

Sainath is one of India's most distinguished journalists: winner of the Ramon Magsaysay Award and Amnesty International’s Global Rights Journalism Prize. For three decades, he has been reporting on growing inequality in rural India and advocating on behalf of Indian family farmers.

Growing inequality

“On the one hand,” remarked Sainath, “you have a country that ranks fourth, sometimes fifth, in the lists of dollar billionaires. On the other hand, [India] ranks 135th in the United Nations Human Development Index [HDI].” (HDI is a measure of a country’s average life expectancy, education level and standard of living.)

Much of the growing discrepancy between the rich and poor in India, he argued, can be traced to the arrival of neoliberalism in the country in the 1990s.

“Neoliberalism is. . . like McDonalds,” explained Sainath, “it tastes the same everywhere, but the impact is very different according to the class and vulnerability of the people it affects.” In India, he claimed it had initiated a rapid transfer of the nation’s wealth out of the hands of the poor and into the hands of the very rich.

According to a recent Forbes report, the 100 richest Indians are all dollar billionaires, with a combined wealth of $346 billion. That is, out of India’s population of 1.25 billion, 100 individuals control about 10 percent of the country’s gross domestic product.

Rising number of farmer suicides

Throughout his career, Sainath has traveled to the homes of families who have lost a loved one to debt-related suicide. Between 1995 and 2013, a total of 300,000 farmers in rural India committed suicide.

“[E]very suicide has a multiplicity of causes,” said Sainath, “but, when you have 300,000 . . . in the same occupation within a compressed period of time, then you want to start looking for. . . the common factors.”

The journalist identified indebtedness as the “central driving factor behind the suicides,” noting that agricultural costs had increased greatly following the implementation of neoliberal agricultural policies.

During visits to the cotton-growing Vidarbha region of the Indian state of Maharashtra, Sainath noticed that many farmers who committed suicide there left suicide notes. These notes were addressed not to family or loved ones, but to India’s finance minister and prime minister, begging them to revise their policies.

Economists Arvind Panagariya and Jagdish Bhagwati have argued that 300,000 suicides is a small number, considering the size of India’s farming base — which they estimate at 53 percent of the country’s total population. Sainath refuted this claim, saying that suicide rates are increasing within a shrinking population of farmers.

When looking at the main “worker cultivator” category of the 2011 census data, he argued, farmers make up only 7.8 percent of India’s population. Furthermore, India has 15 million fewer farmers today than in 1991.

The rise of corporate power in agriculture

Over the past two decades, India has undergone what he called a “corporate hijacking” of Indian agriculture. Apart from land ownership and the act of daily cultivation, “every other sector of agriculture is. . . dominated by corporations,” he said.

Farmer suicides, said Sainath, are a tragic consequence of this rising corporate dominance and the transfer of credit and other resources to the wealthy elite.

Although they are the largest group of landed small farmers in the world, Indian farmers have no control over the prices of the seeds, pesticides, fertilizer and water that they need to operate their farms, or over the markets to which they sell.

And while higher sale prices have resulted from government policies, Sainath argued that market-based pricing had also caused a multifold increase in agricultural costs. At the same time, new credit policies have encouraged the corporatization of the agriculture sector.

Previously, priority sector lending by the state and differential rates of interest allowed poor farmers to obtain loans with little to no interest. Over the last 15 years, however, India’s finance ministry has redefined the agriculture sector so that small farmers now see very little of these priority sector loans.

According to the speaker, the number of loans under 200,000 rupees has decreased significantly, suggesting that small farmers are not receiving state credit. On the other hand, loan amounts that benefit corporate famers — in amounts upwards of 100 million rupees — have increased.

“We've taken resources out of the hands of the poor,” concluded Sainath. “[W]e've taken credit for farming out of the hands of the farmers and redirected it at corporate farmers.”

Wider consequences of neoliberal policies

According to the journalist, changes in the Indian state’s credit policy, the privatization of multiple sectors and the transfer of resources (and access to resources) have all contributed to a rapid transfer of wealth from the poor to the rich in India.

The Indian government is largely responsible for the collapse of restraint on corporate power, asserted Sainath, claiming that the state has withdrawn from sectors that benefit the poor and begun to act as an agent of the super-rich.

The privatization of health care has had a particularly destructive effect on small famers. “In all the farm households that I've visited where people have killed themselves,” said Sainath, “the single largest component of family debt was health [costs].”

He noted that in four days of hospitalization, one farmer he visited accrued half the debt that he had accumulated in four years of farming.

The redistribution of resources — such as land and water — away from the Indian peasantry has also contributed to severe crises of migration, employment and water scarcity.

In the capital city of Delhi, for example, thousands of adolescent girls from Jakar work as 24-hour maids in slave-like conditions. These girls — and many others — left their homes of origin due to external pressures induced by extraction industries, a declining number of agricultural jobs and widespread indebtedness among individual farmers.

Increased migration from the countryside has also placed unbearable pressures on the rural women who remain in the countryside to tend farms in place of the men who leave.

With respect to water resources, Sainath said that during a visit to water-stressed areas last year, he observed the construction of several multistory hotels with swimming pools on every floor. In one instance, architects planned to erect a building with 74 swimming pools in a location not far from the water source where rural Indians stand in line for hours to collect enough to supply their homes.

Finally, he noted that the country’s media had also been privatized and therefore could not be relied on to provide accurate information on inequality and agrarian distress in the countryside. “[The media] are so heavily involved in the rigging of markets…[that] they can never tell you the truth about it,” he remarked.